The financial devastation wrought by excessive student debt is hitting even affluent households, a turn that might finally lead to meaningful change in the way Americans think about higher education—and how they choose to pay for it.

The relentless increase in the cost of college and the rise of outstanding student debt to about $1 trillion have been well documented. So too the increasing rate of students graduating with $50,000 to $100,000 of debt and only limited job prospects. It has long been assumed that affluent households could afford to pay as they go, and so avoid this debt trap. But often that’s not the case.

A Wall Street Journalanalysis of Federal Reserve data shows that households with income between $94,535 and $205,335 saw the biggest jump in the percentage with student loan debt from 2007 to 2010. These affluent households also saw a spike in the size of their loans: On average, they owed $32,869 in 2010, up from $26,639 in 2007, adjusted for inflation. Meanwhile, the group experienced a sharp rise in average overall debt, indicating struggle as opposed to a simple shift in where they choose to borrow.

The data further illustrates the degree to which the Great Recession and slow recovery have taken a toll on even upper income families. As recently as this spring 63% of wealthy Americans said they felt the country was still in a recession. They aren’t going to the dentist as often, and are walking away from homes that have declined in value by $500,000 or more.

Part of the tuition squeeze can be traced to the relatively low level of assistance that affluent households receive: The typical low-income household gets grants and scholarships totaling 36% of costs while higher-income households receive packages that total just 21%, the Journal reports. There isn’t a lot that families with big incomes can do about that. But what they can do is stop reaching deep to attend prestigious and costly universities, a trend that may already be in place. From the Journal:

“Even if the economy rebounds strongly, ‘this downturn has been long enough and severe enough that, for a generation, it will alter the way families think about price and higher education,’ says Richard Bischoff, vice president for enrollment management at Case Western Reserve University in Cleveland. A July 26 report from Moody’s Investors Service noted that reductions in net worth, lackluster job growth and stagnant incomes have ‘created the stiffest tuition price resistance that colleges have faced in decades.’”

To beat the high cost of tuition and stay away from excessive student debt, more students are starting out in a community college or local university, aiming to get enough credits to shave off a few semesters from the time they will spend at a pricier university. Other students are choosing to work for a year and save money rather than borrow right away. Another recently popular choice is staying in state and attending a public university at half the cost of a private institution—especially among students headed for relatively low paying careers in, say, education or law enforcement.

How much student debt is too much? The rule of thumb is don’t graduate with more debt than your expected first year salary. But less is better. As loans become more burdensome and even the affluent back away from top tier schools, higher education will have to adjust. One promising development is the growth of free online courses. Imagine how much less college would cost if students were able to get a bunch of credits at no charge—or how much less a university would have to charge if through online courses one great teacher could reach millions of students. That’s where we are headed. But it will take a while.

Dan Kadlec is a journalist who has written about personal finance for TIME and other outlets for 25 years. He is the author of three books, a leading voice in the global financial literacy movement, and strategic adviser to the National Financial Educators Council.

Kadlec's latest is A New Purpose: Redefining Money, Family, Work,Retirement, and Success

The whole thing was a business scheme. College used to be for a few core purposes, and then you'd have trade schools. Nowadays they tell every single kid to go to college, and it's not necessary. With libraries-- and hey! the internet--you can still learn a lot on your own without the need to pay thousands and thousands and thousands of dollars.

It's a business. They started telling everyone that unless you go to college, you won't get a job. Business start believing they have to hire college-educated kids only. Everyone ends up in debt.

Similar to the crash we experienced due to the debt industry-literally the re-selling of debt--had a crash. All things come to a point of failure and then things change.

It's just really sad that in this case, the people who were being ripped off were students. I wish everyone would just boycott Sallie Mae, personally. What a horrible company.

One more thing--when you sign up for college (by the way, financial aid can be extremely low, even for households making less than $40,000 and with ONE parent.) they don't give you much information about post-college debt payment. They don't tell you that between Government Loans (not exactly aid in my opinion), Perkins Loans, and private loans, you may be paying $450/month on the LOW end! YEah. And what kind of job market are we facing?

College tuition is a wealth transfer scheme. Colleges charge the "rack rate" - around $55,000 per year for most top colleges now - that few people actually pay. Those students whose parents saved nothing for college or any other purpose and don't show high current income get a half or free ride, while parents who saved money and have jobs pay the rack rate, which subsidizes those who don't. This accounts for how families making $100,000 - not an insignificant sum, but also not nearly enough to pay $55,000 per year in tuition alone - incur heavy debt to send their children to college.

Education is expensive because of government-backed loans. If students couldn't borrow the money, the schools would have to charge much less. Like, say, before the student loan fiasco started in the first place.

Out of my group of friends, few had student loan debt upon graduation. Either they were wealthy enough to pay tuition and all up front or poor enough (on paper, meaning the parent with custody was low income while their other parent could afford to buy them new cars) to get generous financial aid. I was in the upper middle class trap. ~25,000 in debt at 6.8% for me. Which I will only start to make a serious dent in after paying off other debt, like my car.

More loans for my parents. My father took out a loan on his retirement because the 6.8% interest on the parent loans was much too high.

1,300 of interest per year on what I owe. What happened to student loans at 2% or 4%?

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The problem is a lack of work ethic. the idea of actually working one's way through college is as foreign to most young people as a television antenna. Not asking their young adult child/ student to actually work between semesters-let alone during- is the problem many parents make for themselves and what drives up the debt. It's time for the parents sending their kids to college to re-set expectations and end the entitlement that says its okay to be an able-bodied adult not required to earn at least some income.

In my experience, holding a job produced mixed results on my student debt. I was lucky to find a job that would work with my demanding school schedule when I was studying architecture at the University of Kansas. I worked 20-30 hour weeks, and still had to borrow to attend as my income didn't even cover my cost of living.

While I'm not sure this is typical of every college student, the pressure really got to me, and I imploded - failing a studio class and sinking into a pretty rough depression for a few years. I ended up borrowing more money than I planned because I had to stay an extra year in school and I had higher medical bills as I sought treatment. In my case, I think it would have been better if I had worked less so I could have spent more time in studio, sleeping, and studying.

There are some parents that don't, but Ray, consider the numbers: 15 million high school students, 20 million college students (numbers from Wikipedia). Companies simply don't create 35 million extra full time jobs during the summer for those kids. They certainly don't create that many part time jobs during the rest of the year either. People do scrimp and save and work through high school and college, graduating without debt. I, personally, am impressed with their achievements because they go significantly against the odds - but they cannot be held up as the only standard against which someone's work ethic is compared.

Well yes, but basically there is a middle squeeze where they supposedly can afford it, but in reality it means taking out tens of thousands in loans at rates around 6.8%- which can seriously derail retirement plans. In additional, why should kids be given aid depending on their parents income? Not everyone is given full financial support from their parents, leaving them with unsubsidized loans that start accuring interest on day 1, while still in school. The biggest problem is that costs are getting out of control. When I started at a public school in California tuition was 2,000 per quarter. 5 years later (I was out a year) it was 4,000 per quarter.